Developing to Manage Conflicts - Doug Baumoel
In any business, effective conflict management is critical to success. This is especially true in a family business, as the conflicts are not left at work. There are differing approaches to conflict management depending on the source of the issue.
One way to address conflict is through development, read below my thoughts:
“While not a term usually associated with managing conflict, development — both structural and personal — can be the most effective approach to managing the systemic conflict that is unique to a family enterprise. It is especially effective when continuing relationships matter. Development is the process of identifying deficiencies and improving them.
Structural Development
“Often in a family business, the following may be the breeding ground for conflict:
- Reporting structures
- Compensation schedules
- Policies and procedures
- Agreements and
- Strategy
“Ambiguity in documents, inappropriate reporting mechanisms, and inefficient communication and process can cause conflict because these all represent structural power entities. It is much easier to change such things than to change the people involved. Often the ‘low-hanging fruit’ in family enterprise conflict management may be found in structural development of the system.
“Specialists in the functional areas of the enterprise can have great impact by evaluating documents and structures, and then providing best-practice advice and independent guidance — for example, by suggesting ways to improve governance. Rather than merely professionalizing the company, the intention should be to support the enterprise in growing itself out of conflict-generating systems by addressing structural issues that underlie or exacerbate conflict.
Personal Development
“Stakeholders can seek to grow themselves out of conflict through coaching and education, by developing increased empathy for and understanding of others, and by addressing psychological issues and longstanding resentments.
The Development Approach
“Development, both structural and personal, is the only one of the three conflict-management approaches that can address values and historical impasses. In fact, as individuals learn more about themselves and the structures they are engaged with, many opposing stakeholder goals may get resolved.
“For example, if a sister with a low tolerance for risk has been fighting her brother’s attempts to grow the company but then makes the effort to learn more about the market and the company’s finances, she may become better able to manage her fears and support the goals for growth.
“Also, when values and historical impasses are addressed first, it is likely that any subsequent negotiations will be more successful. If litigation is still considered, there’s a greater probability that the focus can be on the search for truth and justice rather than revenge and coercion. Arbitration or mediation may then be possible, or you may gain an understanding that allows you to move forward without any “dispute resolution process” at all.
“It is important to be aware of cases in which the family bond cannot work to leverage compromise or a commitment to personal change. When the family lacks the will to rebuild trust, address old resentments and develop a vision for how to be family in the future, litigation or separation might be the likely outcome.”
About Doug Baumoel: Doug is a founding partner at Continuity Family Business Consulting. Having grown up in a family business himself, he is a family enterprise and governance expert. His firm works to manage familial conflicts, and to develop and implement strategies to ensure the success of shared family enterprises while enhancing the important continuing relationships that are at stake. He is a trusted adviser and author, as he co-authored the book ‘Deconstructing Conflict: Understanding Family Business, Shared Wealth, and Power’. In his free time, Doug enjoys playing the guitar.
